<PAGE>

                                                                     EXHIBIT 4.9

                             SUBSCRIPTION AGREEMENT

TO:   OFFSHORE SYSTEMS INTERNATIONAL LTD. (THE "COMPANY" OR THE "ISSUER")

The undersigned (the "Subscriber") hereby irrevocably subscribes for and agrees
to purchase _____________ units (the "Units") of the Issuer, and will pay in
cash on subscription Cdn$_______________ (the "Subscription Proceeds"),
representing Cdn$1,000.00 per Unit, upon and subject to the terms and conditions
set forth in this Subscription Agreement. Each Unit consists of (i) 20 Class B
Series 2 Preference Shares (each a "Preferred Share"), each convertible into the
number of common shares (the "Common Shares") of the Issuer that is determined
by dividing the issue price of Cdn$50 per Preferred Share by Cdn$0.85 (with each
Preferred Share being convertible into approximately 58.82 Common Shares), and
(ii) 588 Common Share purchase warrants (each a "Warrant"). Each Warrant
entitles the holder to purchase one Common Share (each a "Warrant Share") at
Cdn$0.85 per Warrant Share for five years from the Closing Date. The terms of
the Offering, the Preferred Shares and the Warrants are more particularly
described in Schedule "A" attached to and forming part of this Subscription
Agreement. The Warrants will be governed by the terms and conditions set out in
the certificate representing the Warrants which will be delivered to the
Subscriber upon Closing, subject to the terms and conditions of this
Subscription Agreement.

_____________________________________
(Name of Subscriber - please print)

By:  _____________________________________
     Authorized Signature

_____________________________________________
(Official Capacity or Title - please print)

________________________________________________________________________________
(Please print name of individual whose signature appears above if different than
the name of the subscriber printed above.)

_____________________________________
(Subscriber's Address)

_____________________________________
(Telephone Number)

_____________________________________
(Email Address)

REGISTER THE SECURITIES AS SET FORTH BELOW:

_____________________________________
(Name)

_____________________________________
(Account Reference, if applicable)

_____________________________________
(Address)

DELIVER THE SECURITIES AS SET FORTH BELOW:

_____________________________________
(Name)

_____________________________________
(Account Reference, if applicable)

_____________________________________
(Address)

_____________________________________
(Telephone Number)

ACCEPTANCE: The Issuer hereby accepts the above subscription on the terms and
conditions contained in this Subscription Agreement.

                                        OFFSHORE SYSTEMS INTERNATIONAL LTD.

Dated:  _____________________, 2005.    By: _______________________________
                                            Authorized Signatory

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                                      - 2 -

INSTRUCTIONS TO COMPLETE THIS SUBSCRIPTION FOR THE UNITS OF OFFSHORE SYSTEMS
INTERNATIONAL LTD.

1.    Enter number of Units purchased, name, address and signature on cover
      page.

2.    Complete registration or delivery instructions (if different from name and
      address of Subscriber) on cover page.

3.    If you are a resident or a citizen of the United States, complete the
      Certificate of U.S. Person attached as Schedule "B" hereto.

4.    Read and complete Schedule "D" (unless you are a resident or a citizen of
      the United States).

5.    If you are subscribing as an "accredited investor", read and complete
      Annex I to Schedule D if you live in or are otherwise subject to the
      securities laws of Ontario, and Annex II to Schedule D if you live in or
      are otherwise subject to the securities laws of British Columbia, Alberta,
      Saskatchewan, Manitoba, Newfoundland and Labrador, Nova Scotia or Prince
      Edward Island.

6.    If you are a resident of or otherwise subject to the securities laws of
      Saskatchewan and are not an "accredited investor", read and complete and
      duly execute the Risk Acknowledgement Form attached as Annex III to
      Schedule D.

                             WARNING TO SUBSCRIBERS

IN MAKING AN INVESTMENT DECISION SUBSCRIBERS MUST RELY ON THEIR OWN EXAMINATION
OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS
INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE
SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATIONS TO THE CONTRARY IS A CRIMINAL OFFENSE.

THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. SUBSCRIBERS SHOULD BE AWARE THAT THEY MAY
BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE
PERIOD.

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                                      - 3 -

1.          DEFINITIONS

      (a)   "AGENT" means C. E. Unterberg, Towbin, LLC;

      (b)   "APPLICABLE SECURITIES LAWS" means the securities legislation having
            application and the rules, policies, notices and orders issued by
            applicable securities regulatory authorities, including the TSX,
            having application to this Offering and the Issuer;

      (c)   "BROKER WARRANTS" means the Common Share purchase warrants to be
            issued by the Issuer to E.B. Coxe and the Agent, subject to the
            receipt of Shareholder Approval, and in accordance with Section 11
            hereof; each Broker Warrant entitles the holder to purchase one
            Common Share at the exercise price of Cdn$0.85 for a period of five
            years from the date of issuance and the Broker Warrants will be
            governed by the terms and conditions set out in the certificates
            representing the Brokers Warrants;

      (d)   "CLOSING" means the completion of the issue and sale by the Issuer
            and the purchase by the Subscriber of the Units pursuant to this
            Subscription Agreement;

      (e)   "CLOSING DATE" means the day on which the Closing will occur, which
            is expected to occur on or about April 9, 2005;

      (f)   "COMMON SHARE" means a common share without par value in the capital
            of the Issuer;

      (g)   "CURRENT AIF" has the meaning set forth in Section 7.1(d);

      (h)   "ESCROW DATE" means the date on which this Subscription Agreement
            and the Subscription Proceeds are delivered to and placed into
            escrow with the Escrow Agent;

      (i)   "ESCROW AGENT" means McCarthy Tetrault LLP, appointed pursuant to an
            escrow agreement to be entered into between the Issuer and the
            Escrow Agent;

      (j)   "MATERIAL" means material in relation to the Issuer and its
            subsidiaries considered on a consolidated basis;

      (g)   "MATERIAL CHANGE" has the meaning set out in the Securities Act
            (British Columbia);

      (h)   "MATERIAL FACT" means any fact that significantly affects, or could
            reasonably be expected to significantly affect, the market price or
            value of the Issuer's securities;

      (i)   "OFFERING" means the sale by the Issuer of up to 19,500 Units of the
            Issuer on the terms set forth in this Subscription Agreement and
            similar subscription agreements with other subscribers;

      (j)   "PREFERRED SHARE" means a Class B Series 2 Preference Share in the
            capital of the Issuer having the rights and restrictions set forth
            in Schedule "C" attached hereto;

      (k)   "PUBLIC RECORD" means information which has been publicly filed at
            www.sedar.com or www.sec.gov/edgar/searchedgar/webusers.htm by the
            Issuer under Applicable Securities Laws, including, without
            limitation, the Current AIF;

      (l)   "REGULATION D" means Regulation D under the U.S. Securities Act;

      (m)   "REGULATION S" means Regulation S under the U.S. Securities Act;

      (n)   "SCHEDULES" means the schedules attached hereto, namely:

            (i)   A - Term Sheet;

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                                     - 4 -

            (ii)  B - Certificate of U.S. Person;

            (iii) C - Class B Series 2 Preference Shares Special Rights and
                      Restrictions; and

            (iv)  D - Subscriber Qualifications, Representations, Warranties and
                      Covenants

      (k)   "SECURITIES" means, collectively, the Units, Preferred Shares,
            Common Shares, Warrants and Warrant Shares;

      (l)   "SHAREHOLDER APPROVAL" means the requisite approval of the
            shareholders of the Company, in accordance with applicable corporate
            and securities laws, of certain matters in connection with the
            Offering including, without limitation, the approval of the issuance
            of the Warrants with an exercise price of Cdn$0.85 per Warrant
            Share;

      (m)   "SUBSCRIBER" means the person or persons named as Subscriber on the
            cover page of this Subscription Agreement and, if more than one
            person is so named, means all of them jointly and severally;

      (q)   "SUBSCRIPTION AGREEMENT" means this subscription agreement between
            the Subscriber and the Issuer, including all Schedules attached
            hereto, as they may be amended or supplemented from time to time;

      (r)   "TSX" means The Toronto Stock Exchange;

      (s)   "UNITED STATES" means the United States of America, its territories
            and possessions, any state of the United States, and the District of
            Columbia;

      (t)   "UNIT" means 20 Preferred Shares and 588 Warrants sold together
            hereunder;

      (u)   "U.S. ACCREDITED INVESTOR" means a U.S. Person who is an "accredited
            investor" as defined in Rule 501(a) of Regulation D (see Schedule
            "B");

      (v)   "U.S. PERSON" means a "U.S. person" as that term is defined in
            Regulation S;

      (w)   "U.S. SECURITIES ACT" means the United States Securities Act of
            1933, as amended;

      (x)   "WARRANTS" means the Common Share purchase warrants to be issued by
            the Issuer, subject to the terms and conditions of this Subscription
            Agreement; 588 Warrants are included as part of each Unit under the
            Offering, and each whole Warrant is exercisable to acquire one
            Warrant Share for a five year period after the Closing Date at a
            price of Cdn$0.85; and

      (y)   "WARRANT SHARE" means a Common Share to be issued upon the exercise
            of a Warrant.

Unless otherwise indicated herein, all dollar amounts referred to in this
Subscription Agreement, including the symbol "$", refer to Canadian currency.

2.          PROSPECTUS EXEMPT SUBSCRIPTION COMMITMENT

2.1         The Subscriber hereby subscribes for and agrees to purchase from the
            Issuer, subject to the terms and conditions set forth herein, that
            number of Units of the Issuer set out on the cover page of this
            Subscription Agreement at a price of Cdn $1,000.01 per Unit (which
            includes the consideration for the Warrants as contemplated by
            section 2.2). Subject to the terms hereof, this Subscription
            Agreement will be deemed to have been made and be effective only
            upon its acceptance by the Issuer.

2.2         Cdn $1,000 per Unit, paid in cash on subscription, will be allocated
            to the purchase price of the Preferred Shares. The Subscriber will
            pay additional consideration of Cdn $0.01 per Unit for the Warrants,
            which consideration will be paid by the Subscriber on the date of
            issue by way of offset

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                                      - 5-

            against the interest on the Subscription Proceeds payable to the
            Subscriber on the Closing Date pursuant to section 4.3(d) hereof.

3.          ESCROW

3.1         The Subscriber will deliver to the Escrow Agent (a) this duly
            completed and executed Subscription Agreement including the duly
            completed Schedules; and (b) a certified cheque or bank draft
            payable to "McCarthy Tetrault LLP in trust" for the Subscription
            Proceeds or payment of the same amount in such other manner as is
            acceptable to the Issuer, and each of the foregoing will be placed
            in escrow on the Escrow Date with the Escrow Agent.

3.2         If the Issuer accepts the Subscription Agreement delivered by the
            Subscriber, it will communicate its acceptance of same in writing to
            the Agent, or if the Subscriber is SDS Capital Group Inc., to SDS
            Capital Group Inc. on or before the Escrow Date.

4.          CLOSING

4.1         The sale of the Units will be completed at the offices of McCarthy
            Tetrault LLP, the Issuer's counsel, in Vancouver, British Columbia
            at 10:00 a.m. (Vancouver time) on the Closing Date.

4.2         Closing is subject to TSX approval of the Offering and the receipt
            of Shareholder Approval. It is expected that Shareholder Approval
            will be sought at the Issuer's next annual general meeting of
            shareholders on or about April 8, 2005.

4.3         If Shareholder Approval is obtained, the Closing shall occur and on
            the Closing Date: (a) the Subscription Proceeds will be released by
            the Escrow Agent to the Issuer; (b) the Issuer will deliver to the
            Subscriber (to the address set forth on page 1 of this Agreement)
            certificates representing the Preferred Shares and the Warrants,
            registered as instructed by the Subscriber on page 1 of this
            Agreement); (c) the Issuer will deliver to the Subscriber such other
            documents relating to the Closing including, without limitation, an
            opinion from counsel to the Company, regarding such matters as the
            Subscriber may reasonably request; and (d) the Issuer will pay the
            Subscriber interest on the Subscription Proceeds at a rate of 12%
            per annum, accrued from the Escrow Date to, but not including, the
            Closing Date, less applicable withholding tax and the consideration
            for the Warrants as contemplated by section 2.2.

4.4         The Issuer shall be entitled to rely on delivery of a facsimile of
            an executed copy of this Subscription Agreement and acceptance by
            the Issuer of such facsimile Subscription Agreement shall be legally
            effective to create a valid and binding agreement between the
            Subscriber and the Issuer in accordance with the terms hereof.

4.5         If Shareholder Approval is not obtained, Closing will not occur and
            the Escrow Agent will forthwith thereafter refund to the Subscriber
            the Subscription Proceeds, and the Issuer will pay the Subscriber
            interest on the Subscription Proceeds at a rate of 12% per annum,
            less applicable withholding tax, accrued from the Escrow Date to,
            but not including, the date upon which the Subscription Proceeds are
            refunded and delivered to the Subscriber.

5.          SUBSCRIBER'S ACKNOWLEDGEMENTS - REPRESENTATIONS, WARRANTIES AND
            COVENANTS

5.1         The Subscriber represents and warrants to and acknowledges and
            agrees with the Issuer that:

      (a)   it has no knowledge of a "material fact" or "material change" in
            respect of the Issuer that has not been generally disclosed to the
            public;

      (b)   it is resident in the jurisdiction set out on the cover page of this
            Subscription Agreement, and will upon request by the Issuer confirm
            its residency;

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                                     - 6 -

      (c)   the Subscriber has the legal capacity and competence to enter into
            and execute this Subscription Agreement and to take all actions
            required pursuant to this Subscription Agreement and, if the
            Subscriber is a corporation, it is duly incorporated and validly
            subsisting under the laws of its jurisdiction of incorporation,
            continuation or amalgamation and all necessary approvals by its
            directors, shareholders and others have been given to authorize
            execution of this Subscription Agreement on behalf of the
            Subscriber;

      (d)   the entering into of this Subscription Agreement and the
            transactions contemplated hereby do not result in the violation of
            any of the terms and provisions of any law applicable to the
            Subscriber;

      (e)   the Subscriber has duly and validly authorized, executed and
            delivered this Subscription Agreement and understands it is intended
            to constitute a valid and binding agreement of the Subscriber
            enforceable against the Subscriber;

      (f)   no person has made to the Subscriber any written or oral
            representations:

            (i)   that any person will resell or repurchase the Units or
                  Securities;

            (ii)  that, other than as specified in the terms and conditions of
                  this Agreement, any person will refund the purchase price for
                  the Units; or

            (iii) as to the future price or value of the Units or Securities;

      (g)   it understands and acknowledges that the Units are being purchased
            pursuant to an exemption from the prospectus requirements contained
            in the securities legislation in British Columbia and in the
            jurisdiction in which it is resident or otherwise subject to and, as
            a consequence:

            (i)   the Subscriber is restricted from using certain of the civil
                  remedies available under such securities legislation;

            (ii)  the Subscriber may not receive information that would
                  otherwise be required to be provided to the Subscriber under
                  such securities legislation; and

            (iii) the Issuer is relieved from certain obligations that would
                  otherwise apply under such securities legislation;

      (h)   the Subscriber has been advised to consult its own legal and tax
            advisors with respect to the merits and risks of an investment in
            the Units, the tax consequences thereof, and with respect to
            applicable resale restrictions and it is solely responsible for
            compliance with such resale restrictions including, if applicable,
            Rule 904 of Regulation S;

      (i)   to the knowledge of the Subscriber, the sale of the Units was not
            accompanied by any advertisement in any form of such sale;

      (j)   this Subscription Agreement is not enforceable by the Subscriber
            unless it has been accepted by the Issuer;

      (k)   the Units are speculative investments which involve a substantial
            degree of risk;

      (l)   the Subscriber is sophisticated in financial investments, has had
            access to and has received all such information concerning the
            Issuer that the Subscriber considers advisable or necessary in
            connection with the Subscriber's investment decision and the
            Subscriber will not receive an offering memorandum or similar
            disclosure document;

      (m)   the Subscription Proceeds will be available to the Issuer on
            Closing;

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                                     - 7 -

      (n)   no agency, governmental authority, regulatory body, stock exchange
            or other entity has made any finding or determination as to the
            merit of an investment in, nor have any such agencies or
            governmental authorities made any recommendation or endorsement with
            respect to, the Units;

      (o)   the Issuer will rely on the representations and warranties made
            herein or otherwise provided by the Subscriber to the Issuer in
            completing the sale and issue of the Units to the Subscriber,
            subject to the terms and conditions of this Subscription Agreement;
            and

      (p)   the Subscriber acknowledges that the Securities have not been
            registered under the U.S. Securities Act and may not be offered or
            sold in the United States unless registered under the U.S.
            Securities Act and the securities laws of all applicable states of
            the United States or an exemption from such registration
            requirements is available.

6.          REPRESENTATIONS, WARRANTIES AND COVENANTS OF SUBSCRIBER RELATING TO
            AVAILABILITY OF PROSPECTUS EXEMPTIONS

6.1         By executing the Subscription Agreement, the Subscriber (if not
            resident or citizen of the United States) makes the representations,
            warranties and covenants set out in Schedule "D" hereto to the
            Issuer and the Agent and acknowledges that the Issuer and its
            counsel and the Agent and its counsel are relying thereon.

6.2         The Subscriber agrees to execute and deliver to the Issuer herewith
            the Certificate of U.S. Person attached hereto as Schedule "B", if
            applicable.

7.          REPRESENTATIONS AND WARRANTIES OF THE ISSUER

7.1         The Issuer represents and warrants to the Subscriber that, as of the
            date of this Subscription Agreement and at Closing hereunder:

      (a)   the Issuer and its subsidiaries are valid and subsisting
            corporations duly incorporated and in good standing under the laws
            of the jurisdictions in which they were incorporated, continued or
            amalgamated and the Issuer is a "foreign private issuer" as defined
            in section 230.405 of Regulation C promulgated under the U.S.
            Securities Act and shall use its reasonable efforts to remain a
            foreign private issuer during the period in which the Preferred
            Shares may be converted and the Warrants may be exercised and the
            Issuer has complied, or will comply, with all applicable corporate
            and securities laws and regulations in connection with the offer,
            sale and issuance of the Securities, and in connection therewith has
            not engaged in any "directed selling efforts," as such term is
            defined in Regulation S, or any "general solicitation or general
            advertising" as described in Regulation D;

      (b)   no offering memorandum has been or will be provided to the
            Subscriber;

      (c)   the financial statements contained in the Public Record accurately
            reflect the financial position of the Issuer as at their respective
            dates, and no adverse material changes in the financial position of
            the Issuer have taken place since the date of the Issuer's last
            financial statements contained in the Public Record, except as
            disclosed in the Public Record;

      (d)   the Company has filed a current annual information form (the
            "Current AIF") in respect of its fiscal year ended November 30,
            2003;

      (e)   the Issuer has filed all documents that it is required to file
            pursuant to Applicable Securities Laws and all of the documents so
            filed as part of the Public Record comply with the requirements of
            the Applicable Securities Laws and contain no untrue statement of a
            material fact and do not omit to state a material fact that is
            required to be stated or that is necessary to prevent a statement
            that is made from being false or misleading in the circumstances in
            which it was made;

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                                     - 8 -

      (f)   there has not been any adverse material change in the Company from
            that disclosed in the Public Record;

      (g)   the Company has not filed any confidential material change reports;

      (h)   since the date of the most recent financial statements contained in
            the Public Record, the Company has not incurred, assumed or suffered
            any liability (absolute, accrued, contingent or otherwise) or
            entered into any transaction which is or may be material to the
            Company and is not in the ordinary course of business, except as
            contemplated by this Subscription Agreement or as disclosed in the
            Public Record;

      (i)   the creation, issuance and sale of the Units and the Securities of
            which the Units are comprised by the Issuer does not and will not
            conflict with and does not and will not result in a breach of any of
            the terms, conditions or provisions of its constating documents or
            any agreement or instrument to which the Issuer is a party;

      (j)   the Securities will, at the time of issue, be duly allotted, validly
            issued, fully paid and non-assessable and will be free of all liens,
            charges and encumbrances and the Issuer will reserve sufficient
            Common Shares in the treasury of the Issuer to enable it to issue
            Common Shares and Warrant Shares on the conversion of the Preferred
            Shares and exercise of the Warrants;

      (k)   this Subscription Agreement, when accepted by the Issuer, will have
            been duly authorized by all necessary corporate action on the part
            of the Issuer and, subject to acceptance by the Issuer, will
            constitute a valid obligation of the Issuer legally binding upon the
            Issuer and enforceable in accordance with its terms;

      (l)   the Issuer is an electronic filer under National Instrument 13-101 -
            System for Electronic Document Analysis and Retrieval (SEDAR);

      (m)   no order ceasing or suspending trading in the securities of the
            Issuer nor prohibiting sale of such securities has been issued to
            the Issuer or its directors, officers or promoters and, to the best
            of the Issuer's knowledge, no investigations or proceedings for such
            purposes are pending or threatened;

      (n)   the authorized capital of the Issuer consists of 300,000,000 shares
            divided into 100,000,000 Common shares without par value,
            100,000,000 Class A Preferred shares without par value, of which
            10,000,000 shares are designated Class A Preference Series A
            Convertible shares, and 100,000,000 Class B Preference shares with a
            par value of $50.00 per share, of which 10,000,000 are designated
            Class B Series 1 Preference shares and of which 10,000,000 are
            designated Class B Series 2 Preference Shares. A total of 27,488,074
            of the Common Shares, 30,262 of the Class A Preference Series A
            Convertible shares and 57,711 Class B Series 1 Preference Shares are
            issued and outstanding as fully paid and non-assessable;

      (o)   other than as disclosed in the Public Record, the Issuer has no
            material investments in any other company or business organization;

      (p)   except as set out in the Public Record or herein, no person has any
            right, agreement or option, present or future, contingent or
            absolute, or any right capable of becoming a right, agreement or
            option for the issue or allotment of any unissued Common Shares or
            any other security convertible or exchangeable for any such Common
            Shares or to require the Issuer to purchase, redeem or otherwise
            acquire any of the issued or outstanding Common Shares;

      (q)   the Preferred Shares will have the rights and will be subject to the
            restrictions substantially as set forth in Schedule "C" attached
            hereto; and

      (r)   the Subscriber will rely on the representations and warranties made
            herein or otherwise provided by the Issuer to the Subscriber in
            completing the sale and issue of the Units to the Subscriber.

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                                     - 9 -

8.          COVENANTS OF THE ISSUER

8.1         The Issuer hereby covenants with the Subscriber that it:

      (a)   will offer, sell, issue and deliver the Securities pursuant to
            exemptions from the prospectus filing, registration or qualification
            requirements of Applicable Securities Laws and otherwise fulfill all
            legal requirements required to be fulfilled by the Issuer
            (including, without limitation, compliance with all Applicable
            Securities Laws) in connection with the Offering subject to the
            terms and conditions of this Subscription Agreement;

      (b)   will use commercially reasonable efforts to maintain its status as a
            "reporting issuer" not in default in British Columbia, Alberta,
            Ontario and Quebec;

      (c)   will within the required time file with the TSX and any securities
            regulatory authority any documents, reports and information, in the
            required form, required to be filed by Applicable Securities Laws in
            connection with the Offering, together with any applicable filing
            fees and other materials;

      (d)   will use reasonable commercial efforts: (i) to satisfy as
            expeditiously as possible any conditions of the TSX required to be
            satisfied prior to the TSX acceptance of the Issuer's notice of the
            Offering, and (ii) to maintain the listing of its Common Shares on
            the TSX for so long as any Subscriber holds any of the Securities;

      (e)   will use its reasonable commercial efforts to obtain Shareholder
            Approval as soon as reasonably practicable, subject to the
            applicable requirements of corporate and securities laws, and if
            Shareholder Approval is not obtained on or before May 31, 2005 the
            Issuer will instruct the Escrow Agent to promptly return the
            Subscription Proceeds to the Subscriber;

      (f)   will not provide the Subscriber or its agents or counsel with any
            information that the Issuer believes constitutes material non-public
            information, unless prior thereto the Subscriber shall have executed
            a written agreement regarding the confidentiality and use of such
            information. The Issuer understands and confirms that the Subscriber
            shall be relying on the foregoing representations in effecting
            transactions in securities of the Issuer;

      (g)   will file a Form D with the U.S. Securities and Exchange Commission
            pursuant to the requirements of the U.S. Securities Act; and

      (h)   will issue a press release on the Escrow Date, announcing the final
            terms of the Offering, and on the Closing Date, announcing
            completion of the Offering, in accordance with Applicable Securities
            Laws.

9.          NO CONTRACTUAL RIGHT OF ACTION FOR RESCISSION

9.1         The Subscriber acknowledges that it is purchasing the Securities
            issued hereunder pursuant to an exemption which does not require
            delivery to the Subscriber of an offering memorandum or similar
            document, that it will not receive any offering memorandum in
            connection with this Subscription and therefore is not entitled to
            contractual rights of action or rescission.

10.         RESALE RESTRICTIONS AND LEGENDING OF CERTIFICATES

10.1        The Subscriber acknowledges that any resale of the Securities will
            be subject to resale restrictions contained in the Applicable
            Securities Laws applicable to the Issuer, the Subscriber or any
            proposed transferee. The Subscriber understands and acknowledges
            that certificates representing the Securities and all certificates
            issued upon conversion or in exchange therefor or in substitution
            thereof, shall bear the following legend:

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                                     - 10 -

            "Unless permitted under securities legislation, the holder of the
            securities shall not trade the securities before -, 2005 [INSERT
            DATE THAT IS 4 MONTHS AND A DAY FROM THE DATE OF ISSUANCE]."

10.2        If the Subscriber is a U.S. Person or has an address in the U.S. or
            has executed this Subscription Agreement in the United States, the
            Subscriber understands and acknowledges that certificates
            representing the Securities, and all certificates issued upon
            conversion or in exchange therefor or in substitution thereof, shall
            bear the following legend:

            "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
            THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S.
            SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES,
            AGREES FOR THE BENEFIT OF THE CORPORATION THAT SUCH SECURITIES MAY
            BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE
            CORPORATION, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE
            904 OF REGULATION S UNDER THE U.S. SECURITIES ACT, (C) IN COMPLIANCE
            WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT
            PROVIDED BY RULE 144 OR RULE 144A THEREUNDER, IF AVAILABLE, OR (D)
            IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S.
            SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND THE
            SELLER FURNISHES TO THE CORPORATION AN OPINION OF COUNSEL OF
            RECOGNIZED STANDING IN FORM AND SUBSTANCE SATISFACTORY TO THE
            CORPORATION TO SUCH EFFECT. DELIVERY OF THIS CERTIFICATE MAY NOT
            CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK
            EXCHANGES IN CANADA. IF, AT ANY TIME THE CORPORATION IS A "FOREIGN
            ISSUER" AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES ACT,
            THESE SECURITIES ARE BEING SOLD IN COMPLIANCE WITH RULE 904 OF
            REGULATION S UNDER THE U.S. SECURITIES ACT, A NEW CERTIFICATE
            BEARING NO LEGEND, DELIVERY OF WHICH WILL CONSTITUTE "GOOD
            DELIVERY," MAY BE OBTAINED FROM THE CORPORATION'S TRANSFER AGENT
            UPON DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED DECLARATION,
            IN A FORM SATISFACTORY TO THE CORPORATION'S TRANSFER AGENT AND THE
            CORPORATION, TO THE EFFECT THAT THE SALE OF THE SECURITIES
            REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF
            REGULATION S UNDER THE U.S. SECURITIES ACT";

            provided, that if, at the time the Issuer is a "foreign issuer", as
            that term is defined by Regulation S under the U.S. Securities Act,
            the Securities are being sold in compliance with the requirements of
            Rule 904 of Regulation S, as referred to above, and in compliance
            with Canadian local laws and regulations, the legend may be removed
            by providing a declaration to the Issuer's registrar and transfer
            agent for the Securities in the form attached hereto as Appendix A
            to Schedule "B" (or as the Issuer may prescribe from time to time);
            and

            provided further, that, if any of the Securities are being sold
            pursuant to Rule 144 of the U.S. Securities Act, the legend may be
            removed by delivery to the Issuer's transfer agent of an opinion of
            counsel of recognized standing in form and substance satisfactory to
            the Issuer, to the effect that the legend is no longer required
            under applicable requirements of the U.S. Securities Act or state
            securities laws.

10.3        The Warrants may not be exercised in the United States or by or on
            behalf of, or for the account or benefit of, a U.S. Person or a
            person in the United States unless registered under the U.S.
            Securities Act and any applicable state securities laws or unless an
            exemption from such registration requirements is available; provided
            that a U.S. Accredited Investor that purchased Units in the U.S.
            private placement will not be required to deliver an opinion of
            counsel in connection with the exercise

<PAGE>

                                     - 11 -

            of Warrants that are a part of those Units. The certificates
            representing the Warrants, and all certificates issued in exchange
            therefor or in substitution thereof, shall bear the following
            legend:

            "THIS WARRANT AND THE SECURITIES DELIVERABLE UPON EXERCISE THEREOF
            HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
            1933, AS AMENDED (THE "U.S. SECURITIES ACT"), OR THE SECURITIES LAWS
            OF ANY STATE OF THE UNITED STATES. THIS WARRANT MAY NOT BE EXERCISED
            IN THE UNITED STATES OR BY OR ON BEHALF OF, OR FOR THE ACCOUNT OR
            BENEFIT OF, A U.S. PERSON UNLESS THIS WARRANT AND THE SHARES
            ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER
            THE SECURITIES ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY
            SUCH STATE OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS
            AVAILABLE. "UNITED STATES" AND "U.S. PERSON" ARE AS DEFINED BY
            REGULATION S UNDER THE U.S. SECURITIES ACT."

10.4        The Preferred Shares may not be converted into Common Shares in the
            United States or by, on behalf of, or for the account or benefit of,
            a U.S. Person unless registered under the U.S. Securities Act and
            any applicable state securities laws or unless an exemption from
            such registration requirements is available; provided that a U.S.
            Accredited Investor that purchased Units in the U.S. private
            placement will not be required to deliver an opinion of counsel in
            connection with the conversion of Preferred Shares that are a part
            of those Units. The certificates representing the Preferred Shares,
            and all certificates issued in exchange therefor or in substitution
            thereof, shall bear the following legend:

            "THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES DELIVERABLE
            UPON CONVERSION THEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED
            STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES
            ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND
            MAY NOT BE CONVERTED IN THE UNITED STATES OR BY OR ON BEHALF OF, OR
            FOR THE ACCOUNT OR BENEFIT OF, A U.S. PERSON UNLESS THE SECURITIES
            REPRESENTED HEREBY AND THE SHARES ISSUABLE UPON CONVERSION HAVE BEEN
            REGISTERED UNDER THE SECURITIES ACT AND THE APPLICABLE SECURITIES
            LEGISLATION OF ANY SUCH STATE OR ANY EXEMPTION FROM SUCH
            REGISTRATION REQUIREMENTS IS AVAILABLE. "UNITED STATES" AND "U.S.
            PERSON" ARE AS DEFINED BY REGULATION S UNDER THE U.S. SECURITIES
            ACT."

10.5        The Subscriber consents to the Issuer making a notation on its
            records or giving instructions to any transfer agent of the
            Securities in order to implement the restrictions on transfer,
            exercise and conversion set forth and described herein.

11.         FEES AND EXPENSES

11.1        Subject to the Company obtaining Shareholder Approval, in
            consideration for services provided to the Company in connection
            with structuring and arranging the Offering, the Company will upon
            Closing: (a) pay an advisory services fee ("Advisory Services Fee")
            in the amount of Cdn$800,000 and (b) issue 350,000 Broker Warrants.

11.2        Subject to the Company obtaining Shareholder Approval, in
            consideration for the investment banking services provided by the
            Agent in connection with the Offering, the Company will upon
            Closing: (a) pay to the Agent an amount (the "Investment Banking
            Fee") equal to 7% of the gross proceeds raised through the Agent's
            placement of the Units with subscribers under the Offering; and (b)
            issue to the Agent the number of Broker Warrants calculated by
            dividing 50% of the Investment Banking Fee by CDN$0.85.

<PAGE>

                                     - 12 -

11.3        For greater certainty, in the event that Shareholder Approval is not
            obtained: (a) the Advisory Services Fee and the Investment Banking
            Fee will not be payable and (b) the Company will not be required to
            issue any of the Broker Warrants.

11.4        The Company shall be responsible for the reasonable out-of-pocket
            expenses of the Subscriber and the reasonable legal fees and
            disbursements, together with any applicable tax thereon, of the
            Subscriber's counsel incurred in connection with the Offering up to
            an aggregate maximum of Cdn$75,000 in respect of the foregoing
            expenses and fees of Agent, the Subscriber and all other subscribers
            under the Offering. All such fees and expenses shall be paid
            reasonably promptly by the Company directly to SDS Capital Group
            Inc. and to the Agent, in respect of fees and expenses owing to all
            other subscribers under the Offering, immediately after the receipt
            by the Company of an invoice or invoices detailing such fees and
            expenses.

12.         RESTRICTION ON MANDATORY CONVERSION OF PREFERRED SHARES

12.1        The parties acknowledge that the rights and conditions attached to
            the Preferred Shares stipulate, among other things, that the Company
            may, at its option, require the Subscriber to convert its Preferred
            Shares into Common Shares upon the occurrence of certain events as
            described therein (each a "Triggering Event"). The Company
            acknowledges and agrees that, notwithstanding the occurrence of a
            Triggering Event, it may not exercise its right to require the
            Subscriber to convert its Preferred Shares into Common Shares if the
            number of Common Shares to be issued pursuant to such a conversion
            would exceed, when aggregated with all other Common Shares owned by
            the Subscriber at such time, the number of Common Shares which would
            result in the Subscriber owning more than 4.99% of all of the Common
            Shares outstanding at such time. For the purposes of determining
            whether such percentage ownership would be exceeded as a result of
            such conversion, after a Triggering Event occurs, the Subscriber
            shall deliver to the Company from time to time upon written request
            a sworn declaration or affidavit of the Chief Executive Officer, the
            President or the Chief Financial Officer of the Subscriber (or
            individual holding an equivalent office or position with the
            Subscriber) stipulating the number of Common Shares beneficially
            owned by the Subscriber as of a then current date. For greater
            certainty, if and to the extent that conversion of a portion of the
            Subscriber's Preferred Shares would not result in the Subscriber
            owning more than 4.99% of all of the Common Shares outstanding at
            such time, the Company may exercise its right to require the
            Subscriber to convert such number of Preferred Shares into Common
            Shares as would result in the Subscriber owning up to 4.99% of all
            of the Common Shares outstanding at such time. The Company's
            covenant set out in this section 12.1 is personal to the Subscriber
            and is not assignable by the Subscriber to any transferee, purchaser
            or other subsequent holder of the Subscriber's Preferred Shares.

13.         RESTRICTION ON COMPANY'S RIGHT TO REDEEM WARRANTS

13.1        The parties acknowledge that the rights and conditions attached to
            the Warrants stipulate, among other things, that the Company may, at
            its option, redeem the Warrants upon the Common Shares trading at
            the price and for the period stipulated in the certificate
            representing the Warrants (the "Triggering Event"). The Company
            acknowledges and agrees that, notwithstanding the occurrence of the
            Triggering Event, it may not exercise its right to redeem the
            Warrants if the number of Common Shares to be issued pursuant to
            such a conversion would exceed, when aggregated with all other
            Common Shares owned by the Subscriber at such time, the number of
            Common Shares which would result in the Subscriber owning more than
            4.99% of all of the Common Shares outstanding at such time. For the
            purposes of determining whether such percentage ownership would be
            exceeded as a result of the exercise of the Warrants, after the
            Triggering Event occurs, the Subscriber shall deliver to the Company
            from time to time upon written request a sworn declaration or
            affidavit of the Chief Executive Officer, the President or the Chief
            Financial Officer of the Subscriber (or individual holding an
            equivalent office or position with the Subscriber) stipulating the
            number of Common Shares beneficially owned by the Subscriber as of a
            then current date. For greater certainty, if and to the extent that
            the exercise of a portion of the Subscriber's Warrants would not
            result in the Subscriber owning more than 4.99% of all of the Common
            Shares outstanding at such time, the Company may

<PAGE>

                                     - 13 -

            exercise its right to redeem the number of Warrants that, if
            exercised, would result in the Subscriber owning up to 4.99% of all
            of the Common Shares outstanding at such time. The Company's
            covenant set out in this section 13.1 is personal to the Subscriber
            and is not assignable by the Subscriber to any transferee, purchaser
            or other subsequent holder of the Subscriber's Warrants.

14.         RESTRICTION ON SUBSCRIBER'S RIGHT TO CONVERT PREFERRED SHARES OR
            EXERCISE WARRANTS

14.1        Notwithstanding anything to the contrary set forth in this
            Subscription Agreement, at no time may the Subscriber convert the
            Preferred Shares or exercise any Warrants if the number of Common
            Shares to be issued pursuant to such conversion or exercise would
            exceed, when aggregated with all other Common Shares owned by such
            Subscriber at such time, the number of Common Shares which would
            result in such Subscriber owning more than 4.99% of all of the
            Common Shares outstanding at such time; provided, however, that upon
            the Subscriber providing the Company with at least 61 days notice
            (the "Waiver Notice") that such Subscriber is waiving this section
            14 with regard to any or all Common Shares issuable upon conversion
            of the Preferred Shares or the Warrants, this section shall be of no
            force or effect with regard to those Preferred Shares or Warrants
            referenced in the Waiver Notice.

15.         RIGHTS OF FIRST OFFER AND STANDSTILL

15.1        The Company shall deliver notice in writing (a "Financing Notice")
            to the Subscriber, together with all other initial subscribers of
            the Preferred Shares pursuant to the Offering (collectively, the
            "Purchasers") of the material terms and conditions of any further
            equity, equity-linked or debt financing which the Company proposes
            to obtain during a period of 24 months following the Closing. The
            Purchasers collectively shall have the right of first offer to
            provide part or all of any such financing on the terms set out in
            the Financing Notice. Further, in the event such proposed financing
            is to be made at a price (or conversion or exercise price) per
            Common Share at or below Cdn$0.75, the Purchasers collectively shall
            have the right (the "Standstill Right") to cause the Company not to
            complete such financing (such Standstill Right to be exercised by
            the delivery of notice to that effect by Purchasers holding greater
            than 50% of the number of Preferred Shares then outstanding).

15.2        The Purchasers may exercise their right of first offer or Standstill
            Right by notice in writing delivered to the Company within 10 days
            after receipt of the Company's Financing Notice. The Purchasers'
            notice shall (i) stipulate the amount of the financing which the
            Purchasers individually and collectively will provide, or (ii) state
            that the Purchasers wish to exercise their Standstill Right. If the
            financing proceeds, the Purchasers shall be entitled to participate
            in the financing on a pro-rata basis in proportion to their
            percentage participation in the Offering, or in such other
            proportions as they, in consultation with the Issuer, may mutually
            agree upon.

15.3        If a Purchaser fails to give notice within the time stipulated in
            section 15.2 that it will provide all or any portion of such
            financing on the terms set out in the Financing Notice, or if the
            requisite number of Purchasers fail to give notice of exercise of
            the Standstill Right, the Company will have the right to make other
            arrangements to obtain such financing from other sources, provided
            that such financing is provided on terms no less favourable to the
            Company than those set out in the Company's Financing Notice.

15.4        The Purchaser's right of first offer and Standstill Right herein
            will not terminate if the Purchaser fails to exercise such rights
            with respect to any proposed financing, and will continue in force
            with respect to any subsequent proposed financing described in
            section 15.1 for the period stipulated therein.

15.5        Notwithstanding section 15.1, the right of first offer and
            Standstill Right granted to the Subscriber hereunder shall not apply
            to the issuance of any securities by the Company in connection with
            an acquisition, strategic partnership, joint venture or other
            business combination, any public "bought deal" underwritten
            offering, or any vendor take-back debt financing in connection with
            any acquisition.

<PAGE>

                                     - 14 -

16.         RESTRICTIONS ON ISSUANCES OF SECURITIES AND DEBT OBLIGATIONS

16.1        The Company will not issue any securities or incur any debt
            obligations (other than liabilities incurred in the ordinary course
            of business such as trade payables; Technology Partnerships Canada
            payables; wages, vacation, flextime and commissions payable;
            employee taxes, CPP and EI payable; customer payments in excess of
            revenue; federal excise and goods and services taxes payable;
            provincial sales tax payable; and Workers' Compensation payable, and
            liabilities of a similar nature) ranking in any way senior to or
            pari passu with the Preferred Shares without the prior written
            approval of the Subscriber, such approval not to be unreasonably
            withheld. If the Company proposes to issue any securities or incur
            any debt obligations, it shall deliver a notice in writing to the
            Subscriber setting out the material terms and conditions of the
            proposed transaction, the identities of the proposed participants in
            the transaction (if known) and the principal reasons for such
            transaction. The Subscriber shall, within 10 days of receipt of such
            notice, deliver notice in writing to the Company indicating whether
            it is consenting to the proposed transaction and, if not, the reason
            or reasons for refusing its consent. The right granted to the
            subscriber hereunder is personal to the Subscriber and may not be
            assigned to any transferees, purchaser or subsequent holders of the
            Subscriber's Preferred Shares other than affiliates (as defined in
            the Business Corporations Act (British Columbia)) and associates (as
            defined in the Securities Act (British Columbia)) of the Subscriber.
            If and when more than 90% of the Preferred Shares originally issued
            are converted or redeemed, or the Purchasers (as defined in Section
            15) and their respective associates and affiliates otherwise
            collectively cease to hold at least 10% of the number of Preferred
            Shares originally issued under the Offering, the approval of the
            Subscriber will no longer be required. The requirement for such
            approval shall also not apply with respect to any increase in the
            Company's operating line with its current bank or any other major
            commercial bank or combination of banks provided that the total
            borrowing ceiling for the operating line or lines established by the
            Company and its subsidiaries does not exceed 15% of the Company's
            then current consolidated annual gross revenues.

17.         GENERAL

17.1        Time is of the essence hereof.

17.2        Neither this Subscription Agreement nor any provision hereof shall
            be modified, changed, discharged or terminated except by an
            instrument in writing signed by the party against whom any waiver,
            change, discharge or termination is sought.

17.3        The parties hereto shall execute and deliver all such further
            documents and instruments and do all such acts and things as may
            either before or after the execution of this Subscription Agreement
            be reasonably required to carry out the full intent and meaning of
            this Subscription Agreement.

17.4        This Subscription Agreement shall be subject to, governed by and
            construed in accordance with the laws of British Columbia and the
            laws of Canada as applicable therein and the Subscriber hereby
            irrevocably attorns to the exclusive jurisdiction of the courts
            situate therein.

17.5        This Subscription Agreement may not be assigned by any party hereto;
            however, subject to Applicable Securities Laws, the Subscriber shall
            have the right to assign and transfer, without consent of the
            Company or any other person, and without restriction: (a) all or any
            portion of the Preferred Shares and Warrants and the rights thereto
            to any person; (b) any rights hereunder to any affiliate (as defined
            in the Business Corporations Act (British Columbia)) or associate
            (as defined in the Securities Act (British Columbia)).

17.6        Without limitation, this Subscription Agreement and the transactions
            contemplated hereby are conditional upon and subject to the Issuer
            receiving Shareholder Approval and the acceptance of the TSX for
            this Subscription Agreement and the transactions contemplated
            hereby.

<PAGE>

                                     - 15 -

17.7        This Subscription Agreement may be signed by the parties in as many
            counterparts as may be deemed necessary, each of which so signed
            shall be deemed to be an original, and all such counterparts
            together shall constitute one and the same instrument.

17.8        This Subscription Agreement, including, without limitation, the
            representations, warranties, acknowledgements and covenants
            contained herein, shall survive and continue in full force and
            effect and be binding upon the parties notwithstanding the
            completion of the purchase of the Units by the Subscriber pursuant
            hereto.

17.9        The invalidity or unenforceability of any particular provision of
            this Subscription Agreement shall not affect or limit the validity
            or enforceability of the remaining provisions of this Subscription
            Agreement.

17.10       Except as expressly provided in this Subscription Agreement and in
            the agreements, instruments and other documents contemplated or
            provided for herein, this Subscription Agreement contains the entire
            agreement between the parties with respect to the sale of the Units
            and there are no other terms, conditions, representations or
            warranties, whether expressed, implied, oral or written, by statute,
            by common law, by the Issuer, by the Subscriber, or by anyone else.
            If there is any conflict between the provisions of this Subscription
            Agreement and the provisions of the Term Sheet attached hereto as
            Schedule "A", the provisions of this Subscription Agreement or the
            certificates representing the Warrants or Broker Warrants, as the
            case may be, shall prevail.

17.11       Any notice or delivery required or permitted to be given or made by
            the Company to the Subscriber or vice versa shall be in writing and
            shall be made or given by delivering the same manually or by mailing
            the same by prepaid registered post to the intended recipient at the
            address of the other party as follows:

            to the Company:

                   107 - 930 West 1st Street
                   North Vancouver, British Columbia
                   V7P 3N4

            to the Subscriber:

                   _____________________________

                   _____________________________

            or such other address as the other party may direct from time to
            time in writing. Any such notice shall be deemed to have been given
            on the day of delivery, if delivered, or if mailed by prepaid
            registered post, on the fourth business day after and excluding the
            date of mailing.
<PAGE>

                                  SCHEDULE "A"

                                   TERM SHEET

COMPANY:                        Offshore Systems International Ltd.
                                (the "Company")

PURCHASERS:                     SDS Capital Group SPC, Ltd and other
                                institutional investors (collectively, the
                                "Purchasers").

ISSUE:                          CDN$17 - $19.5 million (the "Issue Amount")
                                consisting of 17,000 to 19,500 Units. Each Unit
                                will consist of 20 preferred shares (the
                                "Preferred Shares") convertible into common
                                shares of the Company and 588 share purchase
                                warrants (the "Warrants"); provided that the
                                issuance of the Units is conditional upon the
                                Company obtaining TSX and shareholder approval.

PRICE PER UNIT:                 CDN$1,000.01 per Unit (including the
                                consideration for the Warrants of $0.01 per
                                Unit).

OPTIONAL CONVERSION:            Each Preferred Share will be
                                convertible at the option of the holder into the
                                number of Common Shares of the Company that is
                                determined by dividing the issue price of CDN$50
                                per Preferred Share by CDN $0.85 (with each
                                Preferred Share being convertible into
                                approximately 58.82 common shares).

MANDATORY CONVERSION:           The Company may require the Purchasers to
                                convert the Preferred Shares to Common Shares if
                                (i) at any time after twelve (12) months
                                following the closing date, the closing price of
                                the Common Shares has been greater than 250% of
                                the fixed Conversion Price of CDN $0.85 for at
                                least twenty (20) consecutive trading days, or
                                (ii) at any time upon the Company's sale of its
                                Common Shares in a firm commitment public
                                underwritten offering in which (a) the offering
                                price of the Common Shares is greater than 200%
                                of the fixed Conversion Price of CDN $0.85, (b)
                                the aggregate gross proceeds exceed CDN $40
                                million, and (c) the underlying Common Shares
                                are freely tradable.

CONVERSION DATE:                The date on which a Purchaser delivers to
                                the Company a notice of conversion together with
                                the certificates representing the Preferred
                                Shares being converted duly endorsed for
                                transfer.

DIVIDENDS:                      Fixed cumulative dividends at the rate of 7% per
                                annum, payable semi-annually or upon conversion
                                or redemption.

WARRANTS:                       The number of whole Warrants issued for each
                                Unit subscribed for will be 588. Each whole
                                Warrant will entitle the holder to purchase one
                                Common Share of the Company at the exercise
                                price of CDN $0.85. The Warrants shall be
                                exercisable for a period of five years from the
                                date of issuance at any time at the election of
                                the holders. During the first twelve months
                                following closing, the Warrants will be
                                exercisable for cash. Thereafter until
                                expiration, the Warrants will be exercisable for
                                cash or by cashless exercise (reducing the
                                number of shares to be issued by the Company).
                                The Company may redeem the Warrants for $0.10
                                per Warrant upon twenty days notice, provided
                                that (i) the Common Shares closes above 300% of
                                the exercise price for a period of twenty
                                consecutive trading days, and (ii) the Common
                                Shares underlying the Warrants are freely
                                tradable. Any Warrants which are the subject of
                                a redemption notice may be exercised within the
                                20 day notice period.

<PAGE>
                                       A-2

COMPANY'S RIGHT OF              The Company will also have the right, but not
REDEMPTION:                     the obligation, to redeem the Preferred Shares
                                at any time after 3 years following the closing
                                date at the original issue price plus a premium
                                of 20% of the original issue price. A holder
                                will have 20 days after receipt of notice of
                                redemption within which to convert the Preferred
                                Shares to Common Shares.

LIQUIDATION PREFERENCE:         The liquidation preference per share shall equal
                                the purchase price per Preferred Share plus any
                                accrued but unpaid dividends thereon at the time
                                of liquidation.

VOTING:                         Each Preferred Share will entitle the holder to
                                one vote on all matters brought before the
                                holders of the common shares.

RIGHT OF FIRST OFFER:           For any equity, equity linked, or debt financing
                                within twenty-four (24) months from the closing
                                date, the Purchasers shall have a right of first
                                offer to purchase all or part of the private
                                placement. The Purchasers will have ten (10)
                                trading days to respond. A carve-out of this
                                provision will be granted to the Company for the
                                issuance of stock or debt financing for
                                situations involving strategic partnerships,
                                acquisition candidates and public underwritten
                                offerings.

OTHER RIGHTS:                   Subject to securities laws and the policies of
                                the TSX, the Purchasers shall be entitled to
                                assign and transfer, without any other person's
                                or the Company's consent and without
                                restriction, all or any portion of the Preferred
                                Shares or Warrants and the rights thereto. All
                                per share amounts set forth herein are subject
                                to equitable adjustment for stock splits,
                                dividends, combinations, reorganizations and the
                                like. The Company will not issue any securities
                                or unsecured debt obligations senior to the
                                Preferred Shares without the prior written
                                approval of the holders of a majority of the
                                Preferred Shares, such approval not to be
                                unreasonably withheld.

                                The Company will have the right to make any
                                withholding or deduction in connection with the
                                Preferred Shares, Warrants, or the conversion or
                                exercise thereof, in respect of any present or
                                future tax, levy, duty, impost, assessment or
                                other governmental charge as required by law.

ESCROW AND SHAREHOLDER          All subscription agreements and subscription
APPROVAL:                       funds will be held in escrow by a
                                third party escrow agent mutually acceptable to
                                the parties (the "Escrow Agent"). The Company
                                agrees to seek shareholder approval of certain
                                of the terms of the private placement as soon as
                                reasonably practicable, having regard to the
                                regulatory requirements for the calling of
                                shareholders' meetings. The Company's management
                                will recommend that the shareholders approve the
                                private placement as proposed herein and will
                                solicit proxies to vote in favour of approval.
                                For greater certainty, the parties intend that
                                upon receipt of shareholder approval, the
                                following shall promptly occur without further
                                agreement of the parties:

                                (a)   the Preferred Shares will be issued to the
                                      Purchasers;

                                (b)   the Warrants will be issued to the
                                      Purchasers;

                                (c)   the Escrow Agent will release the
                                      subscription funds to the Company; and

                                (d)   the Purchasers will receive interest on
                                      the subscription funds at a rate of 12%
                                      per annum, less applicable withholding tax
                                      and the consideration for the Warrants of
                                      $0.01 per Unit.

<PAGE>
                                      A-3

                                If the shareholder approval is not obtained, the
                                Escrow Agent will immediately return the
                                subscription funds to the Purchasers, with
                                interest on such funds at a rate of 12% per
                                annum less applicable withholding tax.

CONDITIONS PRECEDENT TO         Completion of legal documentation and due
CLOSING:                        diligence satisfactory to the Company
                                and Purchasers, and receipt of regulatory
                                approval (including TSX acceptance).

EXPENSES:                       At Closing, the Company will pay all reasonable
                                expenses incurred by the Purchasers in
                                connection with the negotiation, preparation and
                                execution of the definitive documents, including
                                attorneys' fees and expenses, to a total maximum
                                of CDN$75,000.

CONFIDENTIALITY:                All parties agree to keep this private placement
                                proposal and all conversations and exchanged
                                information strictly confidential except to the
                                extent that the Company is required by
                                applicable securities laws and regulations to
                                disclose the proposed private placement
                                contemplated by this term sheet.

ACCEPTANCE OF SUBSCRIPTIONS:    The Company reserves the right to accept or
                                reject subscriptions from prospective
                                Purchasers. SDS and parties who are engaged to
                                assist the Company in placing the private
                                placement will use their reasonable commercial
                                efforts to ensure that the subscriptions
                                solicited from prospective Purchasers will not,
                                if accepted by the Company: (a) upon conversion,
                                result in the acquisition by any Purchaser, or
                                group of Purchasers acting in concert, of a
                                control position in the Company; or (b) in the
                                case of subscriptions received from "related
                                parties" of the Company, require the Company to
                                obtain a formal valuation or shareholder
                                approval with respect to the private placement
                                under applicable securities regulations and TSX
                                policies (it being acknowledged that the Company
                                will require shareholder approval to fix the
                                conversion price and issue the warrants as
                                outlined above).

<PAGE>

                                  SCHEDULE "B"

                           CERTIFICATE OF U.S. PERSON

             THIS FORM MUST BE COMPLETED BY UNITED STATES INVESTORS.

A "United States investor" is any person in the United States at the time such
person's buy order is made or any "U.S. person" as defined in Regulation S under
the United States Securities Act of 1933, as amended. This will include: (a) any
natural person resident in the United States; (b) any partnership or corporation
organized or incorporated under the laws of the United States; (c) any trust of
which any trustee is a U.S. person; (d) any partnership or corporation organized
outside the United States by a U.S. person principally for the purpose of
investing in securities not registered under the U.S. Securities Act of 1933,
unless it is organized or incorporated, and owned, by U.S. Accredited Investors
who are not natural persons, estates or trusts; and (e) any estate of which any
executor or administrator is a U.S. person.

The capitalized terms used herein and not defined herein shall have the meanings
ascribed to them in the Subscription Agreement to which this Schedule "B" is
attached.

The Subscriber covenants, represents and warrants to the Issuer that:

      (a)   it understands that the Securities have not been registered under
            the U.S. Securities Act or any state securities laws and that the
            sale contemplated hereby is being made in reliance on the exemption
            from such registration requirement provided by Rule 506 of
            Regulation D;

      (b)   it acknowledges that it has not purchased the Securities as a result
            of any form of general solicitation or general advertising,
            including advertisements, articles, notices or other communications
            published in any newspaper, magazine or similar media or broadcast
            over radio, or television, or any seminar or meeting whose attendees
            have been invited by general solicitation or general advertising;

      (c)   it understands and agrees that there may be material tax
            consequences to the Subscriber of an acquisition, disposition or
            exercise of any of the Securities. The Issuer gives no opinion and
            makes no representation with respect to the tax consequences to the
            Subscriber under United States, state, local or foreign tax law of
            the undersigned's acquisition or disposition of such securities. In
            particular, no determination has been made whether the Issuer will
            be a "passive foreign investment company" ("PFIC") within the
            meaning of Section 1291 of the United States Internal Revenue Code;

      (d)   it understands and agrees that the financial statements of the
            Issuer have been prepared in accordance with Canadian generally
            accepted accounting principles, which differ in some respects from
            United States generally accepted accounting principles, and thus may
            not be comparable to financial statements of United States
            companies;

      (e)   if an individual, it is a resident of the state or other
            jurisdiction listed in its address on the signature page of the
            Subscription Agreement, or if the Subscriber is not an individual,
            the office of the Subscriber at which the Subscriber received and
            accepted the offer to purchase the Issuer's Units is the address
            listed on the signature page of the Subscription Agreement;

      (f)   it, alone or with the assistance of its professional advisors, has
            such knowledge and experience in financial and business matters as
            to be capable of evaluating the merits and risks of an investment in
            the Securities and is able, without impairing its financial
            condition, to hold such securities for an indefinite period of time
            and to bear the economic risk of loss of, and withstand the complete
            loss of, its entire investment;

<PAGE>
                                       B-2

      (g)   the Issuer has provided to it the opportunity to ask questions and
            receive answers concerning the terms and conditions of the offering
            and it has had access to such information concerning the Issuer as
            it has considered necessary or appropriate in connection with its
            investment decision to acquire the Securities;

      (h)   it is acquiring the Securities for its own account and not on behalf
            of any other person for investment purposes only and not with a view
            to any resale, distribution or other disposition of the Securities
            in violation of the United States federal and state securities laws;

      (i)   if it decides to offer, sell or otherwise transfer any of the
            Securities, it will not offer, sell or otherwise transfer any of
            such Securities directly or indirectly, unless

            (i)   the transfer is to the Issuer;

            (ii)  the transfer is made outside the United States in a
                  transaction meeting the requirements of Rule 904 of Regulation
                  S and in compliance with applicable local laws and
                  regulations;

            (iii) the transfer is made in compliance with an exemption from the
                  registration requirements under the U.S. Securities Act
                  provided by Rule 144 or Rule 144A thereunder, if available; or

            (iv)  the Securities are transferred in a transaction that does not
                  require registration under the U.S. Securities Act or any
                  applicable state laws and regulations governing the offer and
                  sale of securities, and it has prior to such sale furnished to
                  the Issuer an opinion of counsel in form and substance
                  satisfactory to the Issuer;

      (j)   It is an "accredited investor" as defined in Regulation D by virtue
            of satisfying one or more of the categories indicated below (please
            place your initials on the appropriate line(s)):

      _________   Category 1.   A bank, as defined in Section 3(a)(2) of the
                                U.S. Securities Act, whether acting in its
                                individual or fiduciary capacity; or

      _________   Category 2.   A savings and loan association or other
                                institution as defined in Section 3(a)(5)(A) of
                                the U.S. Securities Act, whether acting in its
                                individual or fiduciary capacity; or

      _________   Category 3.   A broker or dealer registered pursuant to
                                Section 15 of the Securities Exchange Act of
                                1934; or

      _________   Category 4.   An insurance company as defined in Section 2(13)
                                of the U.S. Securities Act; or

      _________   Category 5.   An investment company registered under the
                                Investment Company Act of 1940; or

      _________   Category 6.   A business development company as defined in
                                Section 2(a)(48) of the Investment Company Act
                                of 1940; or

      _________   Category 7.   A small business investment company licensed by
                                the U.S. Small Business Administration under
                                Section 301(c) or (d) of the Small Business
                                Investment Act of 1958; or

      _________   Category 8.   A plan established and maintained by a state,
                                its political subdivision or any agency or
                                instrumentality of a state or its political
                                subdivisions, for the benefit of its employees,
                                with assets in excess of US$5,000,000; or

<PAGE>
                                       B-3

      _________   Category 9.   An employee benefit plan within the meaning of
                                the Employee Retirement Income Security Act of
                                1974 in which the investment decision is made by
                                a plan fiduciary, as defined in Section 3(21) of
                                such Act, which is either a bank, savings and
                                loan association, insurance company or
                                registered investment advisor, or an employee
                                benefit plan with total assets in excess of
                                US$5,000,000 or, if a self-directed plan, the
                                investment decisions are made solely by persons
                                who are accredited investors; or

      _________   Category 10.  A private business development company as
                                defined in Section 202(a)(22) of the Investment
                                Advisors Act of 1940; or

      _________   Category 11.  An organization described in Section 501(c)(3)
                                of the Internal Revenue Code, a corporation, a
                                Massachusetts or similar business trust, or a
                                partnership, not formed for the specific purpose
                                of acquiring the Shares, with total assets in
                                excess of US$5,000,000; or

      _________   Category 12.  A director or executive officer of the Issuer;
                                or

      _________   Category 13.  A natural person whose individual net worth, or
                                joint net worth with that person's spouse, at
                                the time of this purchase exceeds US$1,000,000;
                                or

      _________   Category 14.  A natural person who had an individual income in
                                excess of US$200,000 in each year of the two
                                most recent years or joint income with that
                                person's spouse in excess of US$300,000 in each
                                of those years and has a reasonable expectation
                                of reaching the same income level in the current
                                year; or

      _________   Category 15.  A trust, with total assets in excess of
                                US$5,000,000, not formed for the specific
                                purpose of acquiring the securities offered,
                                whose purchase is directed by a sophisticated
                                person as described in SEC Rule 506(b)(2)(ii)
                                under the U.S. Securities Act; or

      _________   Category 16.  An entity in which each of the equity owners
                                meets the requirements of one of the above
                                categories.

For the purposes of British Columbia securities laws, the Subscriber certifies
that it is not resident in British Columbia and acknowledges that:

      (a)   no securities commission or similar regulatory authority has
            reviewed or passed on the merits of the Securities;

      (b)   there is no government or other insurance covering the Securities;

      (c)   there are risks associated with the purchase of the Securities;

      (d)   there are restrictions on the Subscriber's ability to resell the
            Securities and it is the responsibility of the Subscriber to find
            out what those restrictions are and to comply with them before
            selling the Securities; and

<PAGE>
                                       B-4

      (e)   the Issuer has advised the Subscriber that the Issuer is relying on
            an exemption from the requirements to provide the Subscriber with a
            prospectus and to sell the Securities through a person registered to
            sell securities under the Securities Act (British Columbia) and, as
            a consequence of acquiring the Securities pursuant to this
            exemption, certain protections, rights and remedies provided by the
            Securities Act (British Columbia), including statutory rights of
            rescission or damages, will not be available to the Subscriber.

             ONLY UNITED STATES INVESTORS NEED TO COMPLETE AND SIGN

         ________________________________________
         Date

         ________________________________________
         Duly authorized signatory for Subscriber

         ________________________________________
         (Print name of Subscriber)

<PAGE>
                                       B-5

                                  APPENDIX A TO

                    SCHEDULE "B", CERTIFICATE OF U.S. PERSON

                    FORM OF DECLARATION FOR REMOVAL OF LEGEND

TO:   Registrar and transfer agent for the shares of OFFSHORE SYSTEMS
      INTERNATIONAL LTD. (the "Issuer").

The undersigned (A) acknowledges that the sale of the securities of the Issuer
to which this declaration relates is being made in reliance on Rule 904 of
Regulation S under the United States Securities Act of 1933, as amended (the
"U.S. Securities Act"), and (B) certifies that (1) the undersigned is not an
"affiliate" of the Issuer (as that term is defined in Rule 405 under the U.S.
Securities Act); (2) the offer of such securities was not made to a person in
the United States and either (a) at the time the buy order was originated, the
buyer was outside the United States, or the seller and any person acting on its
behalf reasonably believed that the buyer was outside the United States, or (b)
the transaction was executed on or through the facilities of the TSX and neither
the seller nor any person acting on its behalf knows that the transaction has
been prearranged with a buyer in the United States; (3) neither the seller nor
any affiliate of the seller nor any person acting on their behalf has engaged or
will engage in any directed selling efforts in the United States in connection
with the offer and sale of such securities; (4) the sale is bona fide and not
for the purpose of "washing off" the resale restrictions imposed because the
securities are "restricted securities" (as that term is defined in Rule
144(a)(3) under the U. S. Securities Act); (5) the seller does not intend to
replace such securities with fungible unrestricted securities; and (6) the
contemplated sale is not a transaction, or part of a series of transactions,
which, although in technical compliance with Regulation S, is part of a plan or
scheme to evade the registration provisions of the U.S. Securities Act. Terms
used herein have the meanings given to them by Regulation S under the U.S.
Securities Act.

Dated _________, 2005.

                        X

                        Signature of individual (if Purchaser IS an individual)

                        X

                        Authorized signatory (if Purchaser is NOT an individual)

                        Name of Purchaser (PLEASE PRINT)

                        Name of authorized signatory (PLEASE PRINT)

                        Official capacity of authorized signatory (PLEASE PRINT)

<PAGE>

                                  SCHEDULE "C"

                       CLASS B SERIES 2 PREFERENCE SHARES

                         SPECIAL RIGHTS AND RESTRICTIONS

<PAGE>

                                  SCHEDULE "D"

      SUBSCRIBER QUALIFICATIONS, REPRESENTATIONS, WARRANTIES AND COVENANTS

      By executing this Subscription Agreement, the Subscriber represents,
warrants and covenants (on its own behalf or, if applicable, on behalf of those
for whom the Subscriber is contracting hereunder) to and in favour of the
Company and the Agent (which representations, warranties and covenants shall
survive the closing of the purchase of the Units) and acknowledges that the
Company and its counsel and the Agent and its counsel are relying thereon that:

      (a)   either (i) the Subscriber is purchasing the Units as principal for
            its own account and not for the benefit of any other person, and not
            with a view to the resale or distribution of all or any of the Units
            and the Subscriber complies with such of the subparagraphs in
            paragraph (b) below as are applicable to it by virtue of the place
            of residence or by virtue of it being subject to the applicable
            securities legislation of such province or paragraph (c) below; or
            (ii) if the Subscriber is acting as agent or trustee for one or more
            beneficial Subscribers whose identity is disclosed or undisclosed or
            identified by account number only, each beneficial purchaser is
            purchasing as principal for its own account and not for the benefit
            of any other person, and not with a view to the resale or
            distribution of all or any of the Units, and each beneficial
            purchaser complies with such of the subparagraphs in paragraph (b)
            below as are applicable to it by virtue of its place of residence or
            by virtue of it being subject to the applicable securities
            legislation of such province or paragraph (c) below; or (iii) the
            Subscriber complies with such of the subparagraphs in paragraph (b)
            below as are applicable to it by virtue of its place of residence or
            by virtue of it being subject to the applicable securities
            legislation of such province or paragraph (c) below and is deemed to
            be purchasing as principal, by virtue of its place of residence in
            British Columbia, Alberta, Saskatchewan, Manitoba, Newfoundland and
            Labrador, Nova Scotia or Saskatchewan or by virtue of being subject
            to the applicable securities legislation of such provinces it
            satisfies subparagraphs (A), (B) or (C) below:

            (A)   Subject to subsection (B) below a trust company or trust
                  corporation registered or authorized to carry on business
                  under the Trust and Loan Companies Act (Canada) or under
                  comparable legislation in a jurisdiction of Canada or a
                  foreign jurisdiction, trading as a trustee or agent on behalf
                  of a fully managed account is deemed to be purchasing as
                  principal;

            (B)   Subsection (A) above does not apply to a trust company or
                  trust corporation registered under the laws of Prince Edward
                  Island that is not registered under the Trust and Loan
                  Companies Act (Canada) or under comparable legislation in
                  another jurisdiction of Canada;

            (C)   A person or company trading as agent on behalf of a fully
                  managed account if that person or company is registered or
                  authorized to carry on business under the securities
                  legislation of a jurisdiction of Canada or a foreign
                  jurisdiction as a portfolio manager or under an equivalent
                  category of advisor or is exempt from registration as a
                  portfolio manager or the equivalent category of advisor is
                  deemed to be purchasing as principal;

      (b)   the offering and sale of the Units to the Subscriber or beneficial
            purchaser is exempt from the prospectus requirements of applicable
            securities legislation by virtue of the fact that if the Subscriber
            or beneficial purchaser, as the case may be, is a resident of or
            otherwise subject to the securities legislation of:

            (i)   British Columbia, Alberta, Saskatchewan, Manitoba,
                  Newfoundland and Labrador, Nova Scotia or Prince Edward
                  Island, and:

                  (A)   it is an "accredited investor" as defined in
                        Multilateral Instrument 45-103 - Capital Raising
                        Exemptions ("MI-45-103") such that one or more of the
                        categories set forth in Annex II to this Schedule A
                        correctly and in all respects describes the Subscriber,
                        and the Subscriber has so indicated by checking the box
                        opposite each category on such Annex II which so
                        describes it or the beneficial purchaser, as applicable,
                        and the Subscriber acknowledges that by signing this
                        Agreement it is

<PAGE>
                                       D-2

                        certifying that the statements made by checking the
                        appropriate accredited investor categories are true and
                        correct; or

                  (B)   it is:

                        (I)   a director, senior officer or control person of
                              the Company, or of an affiliate of the Company as
                              defined in Annex II to this Schedule A;

                        (II)  a spouse, parent, grandparent, brother, sister or
                              child of any person referred to in subclause (I)
                              above; or

                        (III) a parent, grandparent, brother, sister or child of
                              the spouse of any person referred to in subclause
                              (I) above; or

                        (IV)  a close personal friend of any person referred to
                              in subclause (I) above and, if requested by the
                              Company or the Agent, will provide a signed
                              statement describing any of such persons; or

                        (V)   a close business associate of any person referred
                              to in subclause (I) above and, if requested by the
                              Company or the Agent, will provide a signed
                              statement describing any of such persons; or

                        (VI)  a founder of the Company or a spouse, parent,
                              grandparent, brother, sister, child, close
                              personal friend or close business associate of a
                              founder of the Company above and, if requested by
                              the Company or the Agent, will provide a signed
                              statement describing any such personal friend or
                              close business associate; or

                        (VII) a parent, grandparent, brother, sister or child of
                              the spouse of a founder of the Company; or

                        (VIII) a person or company of which a majority of the
                              voting securities are beneficially owned by or a
                              majority of the directors are persons or companies
                              described in subclause (I) through (VII) above; or

                        (IX)  a trust or estate of which all of the
                              beneficiaries or a majority of the trustees are
                              persons or companies described in subclause (I)
                              through (VII) above;

                        however, if a resident of or otherwise subject to the
                        securities legislation of Saskatchewan, and if
                        purchasing under (IV) or (V) above or as a close
                        personal friend or close business associate of a founder
                        of the issuer or as a person or company described in
                        (VIII) or (IX) above if the trade is based in whole or
                        in part on a close personal friendship or close business
                        association, the Subscriber has completed and delivered
                        to the Company Annex III to Schedule A in accordance
                        with the instruction therein; and

            (ii)  Ontario, and it is an "accredited investor" (as that term is
                  defined in Ontario Securities Commission Rule 45-501 - Exempt
                  Distributions) such that one or more of the categories set
                  forth in Annex I to this Schedule A correctly and in all
                  respects describes the Subscriber or the beneficial purchaser,
                  as applicable, and the Subscriber has so indicated by checking
                  the box opposite each category on such Annex I which so
                  describes it or the beneficial purchaser, as applicable, and
                  the Subscriber acknowledges that by signing this Subscription
                  Agreement it is certifying that the statements made by
                  checking the appropriate accredited investor categories are
                  true and correct; and

<PAGE>
                                       D-3

            (iii) Quebec, and it is a "sophisticated purchaser" within the
                  meaning of Section 43, 44 or 45 of the Securities Act (Quebec)
                  and is purchasing the Units for its own account, or if it is a
                  trust company licensed under the Trust Companies and Savings
                  Companies Act (Quebec) or an insurance company holding a
                  license under the Act respecting insurance (Quebec) or a
                  dealer or adviser registered in conformity with Section 148 of
                  the Securities Act (Quebec), it is purchasing the Units for
                  the portfolio of a third person managed solely by that
                  company, dealer or adviser; and

            (iv)  if it is a person referred to in subparagraph (ii) or (iii)
                  above, it certifies that it is not resident in British
                  Columbia;

      (c)   if the Subscriber or beneficial purchaser, as the case may be, is
            not a Subscriber under (b) above, it is purchasing (A) pursuant to
            an exemption or other decision from applicable securities regulators
            from any prospectus and registration requirements (particulars of
            which are enclosed herewith) and the Issuer shall have approved such
            purchase in reliance thereon, or (B) in any manner otherwise
            available to the Issuer and the Subscriber under applicable
            securities legislation (in which case particulars of which are
            enclosed herewith) and the Subscriber or beneficial Subscriber, as
            the case may be, has delivered to the Issuer such further
            particulars of such exemption and the Subscriber's qualification
            thereunder as the Issuer may reasonably request and the Issuer shall
            have approved such purchase in reliance thereon;

      (d)   it and any beneficial purchaser for whom it is acting:

            (i)   is not a U.S. Person as defined in the United States Act of
                  1933, as amended (the "1933 Act") and is not purchasing the
                  Common Shares for the account of or the benefit of a U.S.
                  Person;

            (ii)  was not offered the Common Shares in the United States (as
                  defined in Regulation S under the 1933 Act); and

            (iii) did not execute or deliver this agreement in the United
                  States;

      (e)   if the Subscriber is resident outside of Canada and the United
            States, the Subscriber certifies that it is not resident in British
            Columbia and acknowledges that:

            (i)   it is knowledgeable of, or has been independently advised as
                  to the applicable securities laws of the securities regulatory
                  authorities (the "Authorities") having application in the
                  jurisdiction in which the Subscriber is resident (the
                  "International Jurisdiction") which would apply to the
                  acquisition of the Subscriber's Units, if any;

            (ii)  it is purchasing the Subscriber's Units pursuant to exemptions
                  from the prospectus and registration requirements under the
                  applicable securities laws of the Authorities in the
                  International Jurisdictions or, if such is not applicable, the
                  Subscriber is permitted to purchase the Subscriber's Units
                  under the applicable securities laws of the Authorities in the
                  International Jurisdiction without the need to rely on any
                  exemption;

            (iii) the applicable laws of the Authorities in the International
                  Jurisdiction do not require the Issuer to make any filings or
                  seek any approvals of any nature whatsoever from any Authority
                  of any kind whatsoever in the International Jurisdiction in
                  connection with the issue and sale or resale of the
                  Subscriber's Units;

            (iv)  no securities commission or similar regulatory authority has
                  reviewed or passed on the merits of the Securities;

            (v)   there is no government or other insurance covering the
                  Securities;

            (vi)  there are risks associated with the purchase of the
                  Securities;

<PAGE>
                                       D-4

            (vii) there are restrictions on the Subscriber's ability to resell
                  the Securities and it is the responsibility of the Subscriber
                  to find out what those restrictions are and to comply with
                  them before selling the Securities; and

            (viii) the Issuer has advised the Subscriber that the Issuer is
                  relying on an exemption from the requirements to provide the
                  Subscriber with a prospectus and to sell the Securities
                  through a person registered to sell securities under the
                  Securities Act (British Columbia) and, as a consequence of
                  acquiring the Securities pursuant to this exemption, certain
                  protections, rights and remedies provided by the Securities
                  Act (British Columbia), including statutory rights of
                  rescission or damages, will not be available to the
                  Subscriber.
<PAGE>

                                      D-5

                             ANNEX I TO SCHEDULE "D"

                 TO BE COMPLETED BY ONTARIO ACCREDITED INVESTORS

The Subscriber is a resident of or otherwise subject to the securities
legislation of Ontario and is an "accredited investor", as such term is defined
in Ontario Securities Commission Rule 45-501 - Exempt Distribution ("OSC Rule
45-501"), as at the Closing Date, the Subscriber falls within one or more of the
following categories (Please check one or more, as applicable):

[ ]      (a)  a bank listed in Schedule I or II of the Bank Act (Canada), or an
              authorized foreign bank listed in Schedule III of that Act;

[ ]      (b)  the Business Development Bank incorporated under the Business
              Development Bank Act (Canada);

[ ]      (c)  a loan corporation or trust corporation registered under the Loan
              and Trust Corporations Act (Ontario) or under the Trust and Loan
              Companies Act (Canada), or under comparable legislation in any
              province or territory of Canada;

[ ]      (d)  a co-operative credit society, credit union central, federation of
              caisses populaires, credit union or league, or regional caisse
              populaire, or an association under the Cooperative Credit
              Associations Act (Canada), in each case, located in Canada;

[ ]      (e)  a company licensed to do business as an insurance company in any
              province or territory of Canada;

[ ]      (f)  a subsidiary entity of any person or company referred to in
              paragraph (a), (b), (c), (d) or (e), where the company owns all
              of the voting shares of the subsidiary;

[ ]      (g)  a person or company registered under the Securities Act (Ontario)
              or securities legislation in another province or territory of
              Canada as an adviser or dealer, other than a limited market
              dealer;

[ ]      (h)  the government of Canada or of any province or territory of
              Canada, or any crown corporation, instrumentality or agency of a
              Canadian federal, provincial or territorial government;

[ ]      (i)  any Canadian municipality or any Canadian provincial or
              territorial capital city;

[ ]      (j)  any national, federal, state, provincial, territorial or municipal
              government of or in any country, or political subdivision of a
              country, other than Canada, or any instrumentality or agency
              thereof;

[ ]      (k)  a pension fund that is regulated by either the Office of the
              Superintendent of Financial Institutions (Canada) or a provincial
              pension commission or similar regulatory authority;

[ ]      (l)  a registered charity under the Income Tax Act (Canada);

[ ]      (m)  an individual who beneficially owns, or who together with a spouse
              beneficially own, financial assets having an aggregate realizable
              value that, before taxes but net of any related liabilities (as
              defined below), exceeds $1,000,000;

[ ]      (n)  an individual whose net income before taxes exceeded $200,000 in
              each of the two most recent years or whose net income before taxes
              combined with that of a spouse exceeded $300,000 in each of those
              years and who, in either case, has a reasonable expectation of
              exceeding the same net income level in the current year;

[ ]      (o)  an individual who has been granted registration under the
              Securities Act (Ontario) or securities legislation in another
              province or territory of Canada as a representative of a person or
              company referred to in paragraph (g), whether or not the
              individual's registration is still in effect;

[ ]      (p)  a promoter of the issuer or an affiliated entity of a promoter of
              the issuer;

<PAGE>
                                      D-6

[ ]      (q)  a spouse, parent, brother, sister, grandparent or child of an
              officer, director or promoter of the issuer;

[ ]      (r)  a person or company that, in relation to the issuer is an
              affiliated entity or a person or company referred to in clause (c)
              of the definition of distribution in subsection 1(1) of the
              Securities Act (Ontario);

[ ]      (s)  an issuer that is acquiring securities of its own issue;

[ ]      (t)  a company, limited liability company, limited partnership,
              limited liability partnership, trust or estate, other than a
              mutual fund or non-redeemable investment fund, that had net assets
              of at least $5,000,000 as reflected in its most recently prepared
              financial statements;

[ ]      (u)  a person or company that is recognized by the Commission as
              an accredited investor;

[ ]      (v)  a mutual fund or non-redeemable investment fund that, in Ontario,
              distributes its securities only to persons or companies that are
              accredited investors;

[ ]      (w)  a mutual fund or non-redeemable investment fund that, in Ontario,
              distributes its securities under a prospectus for which a receipt
              has been granted by the Director or, if it has ceased distribution
              of its securities, has previously distributed its securities
              in this manner;

[ ]      (x)  a fully managed account if it is acquiring a security that is not
              a security of a mutual fund or non-redeemable investment fund;

[ ]      (y)  an account that is fully managed by a trust corporation registered
              under the Loan and Trust Corporations Act (Ontario) or under the
              Trust and Loan Companies Act (Canada), or under comparable
              legislation in any other jurisdiction;

[ ]      (z)  an entity organized outside of Canada that is analogous to any of
              the entities referred to in paragraphs (a) through (g) and
              paragraph (k) in form and function; and

[ ]      (aa) a person or company in respect of which all of the owners of
              interests, direct or indirect, legal or beneficial, are persons
              or companies that are accredited investors.

For the purposes hereof, the following definitions are included for convenience:

            "COMPANY" means any corporation, incorporated association,
            incorporated syndicate or other incorporated organization;

            "ENTITY" means a company, syndicate, partnership, trust or
            unincorporated organization;

            "FINANCIAL ASSETS" means cash, securities, or any contract of
            insurance or deposit or evidence thereof that is not a security for
            the purposes of the Securities Act (Ontario);

            "FULLY MANAGED ACCOUNT" means an investment portfolio account of a
            client established in writing with a portfolio adviser who makes
            investment decisions for the account and has full discretion to
            trade in securities of the account without requiring the client's
            express consent to a transaction;

            "MUTUAL FUND" includes an issuer of securities that entitle the
            holder to receive on demand, or within a specified period after
            demand, an amount computed by reference to the value of a
            proportionate interest in the whole or in a part of the net assets,
            including a separate fund or trust account, of the issuer of the
            securities;

            "NON-REDEEMABLE INVESTMENT FUND" means an issuer

            (a)   whose primary purpose is to invest money provided by its
                  security holders;
<PAGE>
                                      D-7

            (b)   that does not invest for the purpose of exercising effective
                  control, seeking to exercise effective control, or being
                  actively involved in the management of the issuers in which it
                  invests, other than other mutual funds or non-redeemable
                  investment funds; and

            (c)   that is not a mutual fund;

            "PERSON" means an individual, partnership, unincorporated
            association, unincorporated syndicate, unincorporated organization,
            trust, trustee, executor, administrator, or other legal
            representative;

            "PORTFOLIO ADVISER" means

            (a)   a portfolio manager;

            (b)   a broker or investment dealer exempted from registration as an
                  adviser under subsection 148(1) of the regulation made under
                  the Securities Act (Ontario) if that broker or investment
                  dealer is not exempt from the by-laws or regulations of The
                  Toronto Stock Exchange or the Investment Dealers' Association
                  of Canada referred to in that subsection;

            "RELATED LIABILITIES" means liabilities incurred or assumed for the
            purpose of financing the acquisition or ownership of financial
            assets and liabilities that are secured by financial assets;

            "SPOUSE", in relation to an individual, means another individual to
            whom that individual is married, or another individual of the
            opposite sex or the same sex with whom that individual is living in
            a conjugal relationship outside marriage;

In OSC Rule 45-501 a person or company is considered to be an affiliated entity
of another person or company if one is a subsidiary entity of the other, or if
both are subsidiary entities of the same person or company, or if each of them
is controlled by the same person or company.

In OSC Rule 45-501 a person or company is considered to be controlled by a
person or company if

      (a)   in the case of a person or company,

            (i)   voting securities of the first-mentioned person or company
                  carrying more than 50 percent of the votes for the election of
                  directors are held, otherwise than by way of security only, by
                  or for the benefit of the other person or company, and

            (ii)  the votes carried by the securities are entitled, if
                  exercised, to elect a majority of the directors of the
                  first-mentioned person or company;

      (b)   in the case of a partnership that does not have directors, other
            than a limited partnership, the second-mentioned person or company
            holds more than 50 percent of the interests in the partnership; or

      (c)   in the case of a limited partnership, the general partner is the
            second-mentioned person or company.

In OSC Rule 45-501 a person or company is considered to be a subsidiary entity
of another person or company if

      (a)   it is controlled by,

            (i)   that other, or

            (ii)  that other and one or more persons or companies each of which
                  is controlled by that other, or

            (iii) two or more persons or companies, each of which is controlled
                  by that other, or

      (b)   it is subsidiary entity of a person or company that is the other's
            subsidiary entity.

<PAGE>
                                      D-8

                            ANNEX II TO SCHEDULE "D"

      TO BE COMPLETED BY BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN, MANITOBA,
   NEWFOUNDLAND AND LABRADOR, NOVA SCOTIA AND PRINCE EDWARD ISLAND ACCREDITED
                                    INVESTORS

The Subscriber and any beneficial subscriber are each a resident of or otherwise
subject to the securities legislation of British Columbia, Alberta,
Saskatchewan, Manitoba, Newfoundland and Labrador, Nova Scotia and Prince Edward
Island and is an "accredited investor", as such term is defined in MI-45-103, as
at the Closing Date, and the Subscriber and any beneficial subscriber, as
applicable, falls within one or more of the following categories (Please check
one or more, as applicable):

[ ]      (a)  a Canadian financial institution, or an authorized foreign bank
              listed in Schedule III of the Bank Act (Canada);

[ ]      (b)  the Business Development Bank of Canada incorporated under the
              Business Development Bank of Canada Act (Canada);

[ ]      (c)  an association under the Cooperative Credit Association Act
              (Canada) located in Canada or a central cooperative credit society
              for which an order has been made under subsection 473(1) of that
              Act;

[ ]      (d)  a "subsidiary" (within the meaning of that expression as used in
              applicable securities laws) of any person or company referred to
              in paragraphs (a) to (c), if the person or company owns all of the
              voting securities of the subsidiary, except the voting securities
              required by law to be owned by directors of that subsidiary;

[ ]      (e)  a person or company registered under the securities legislation,
              or under the securities legislation of jurisdiction of Canada, as
              an adviser or dealer, other than a limited market dealer
              registered under the Securities Act (Ontario) or the Securities
              Act (Newfoundland and Labrador);

[ ]      (f)  an individual registered or formerly registered under the
              securities legislation of a jurisdiction of Canada, as a
              representative of a person or company referred to in paragraph
              (e);

[ ]      (g)  the government of Canada or a province or territory of Canada, or
              any crown corporation or agency or wholly-owned entity of the
              government of Canada or a province or territory of Canada;

[ ]      (h)  a municipality, public board or commission in Canada;

[ ]      (i)  any national, federal, state, provincial, territorial or municipal
              government of or in any country other than Canada (or a political
              subdivision thereof), or any agency of that government;

[ ]      (j)  a pension fund that is regulated by either the Office of the
              Superintendent of Financial Institutions (Canada) or a pension
              commission or similar regulatory authority of a province or
              territory of Canada;

[ ]      (k)  an individual who, either alone or with a spouse, beneficially
              owns, directly or indirectly, financial assets having an aggregate
              realizable value that before taxes, but net of any related
              liabilities, exceeds $1,000,000;

[ ]      (l)  an individual whose net income before taxes exceeded $200,000 in
              each of the two most recent years or whose net income before taxes
              combined with that of a spouse exceeded $300,000 in each of the
              two most recent years and who, in either case, reasonably expects
              to exceed that net income level in the current year;

[ ]      (m)  a person or company other than a mutual fund or non-redeemable
              investment fund, that either alone or with a spouse has net assets
              of at least $5,000,000, and unless the person or company is an
              individual, the amount is shown on its most recently prepared
              financial statements;

[ ]      (n)  a mutual fund or non-redeemable investment fund that, in the local
              jurisdiction, distributes its securities only to persons or
              companies that are accredited investors;

[ ]      (o)  a mutual fund or non-redeemable investment fund that, in the local
              jurisdiction, is distributing or has distributed its securities
              under one or more prospectuses for which the regulator has issued
              receipts;

<PAGE>
                                       D-9

[ ]      (p)  a trust company or trust corporation registered or authorized to
              carry on business under the Trust and Loan Companies Act (Canada)
              or under comparable legislation of a province or territory of
              Canada or a country other than Canada, trading as a trustee or
              agent on behalf of a "fully managed" account (within the meaning
              of that expression as used in applicable securities laws);

[ ]      (q)  a person or company trading as agent on behalf of a fully managed
              account if that person or company is registered or authorized to
              carry on business under the securities legislation of a province
              or territory of Canada or a country other than Canada as a
              portfolio manager or under an equivalent category or adviser or is
              exempt from registration as a portfolio manager or the equivalent
              category of adviser;

[ ]      (r)  a registered charity under the Income Tax Act (Canada) that, in
              regard to the trade, has obtained advice from an "eligibility
              adviser" (as defined in MI 45-103) or other adviser registered to
              provide advice on the securities being traded;

[ ]      (s)  an entity organized in a country other than Canada (or a political
              subdivision thereof) that is analogous to any of the entities
              referred to in paragraphs (a) through (e) and paragraph (j) in
              form and function; or

[ ]      (t)  a person or company in respect of which all of the owners of
              interests, direct or indirect, legal or beneficial, except the
              voting securities required by law to be owned by the directors,
              are persons or companies that are "accredited investors" (as
              defined in MI 45-103);

For the purposes hereof, the following definitions are included for convenience:

           "AFFILIATE" means an issuer connected with another issuer because

                  (a)   one of them is the subsidiary of the other, or

                  (b)   each of them is controlled by the same person or
                        company;

           "BENEFICIAL OWNERSHIP" of securities by a person occurs

            (A)   for the purposes of Saskatchewan, British Columbia, Nova
                  Scotia, Newfoundland and Labrador and Prince Edward Island
                  securities law, when such securities are beneficially owned by

                  (a)   an issuer controlled by that person, or

                  (b)   an affiliate of that person or an affiliate of an issuer
                        controlled by that person;

            (B)   for the purposes of Alberta securities law, when such
                  securities are beneficially owned by

                  (a)   a company controlled by that person or an affiliate of
                        that company,

                  (b)   an affiliate of that person, or

                  (c)   through a trustee, legal representative, agent or other
                        intermediary of that person;

            "CANADIAN FINANCIAL INSTITUTION" means a bank, loan corporation,
            trust company, insurance company, treasury branch, credit union or
            caisse populaire that, in each case, is authorized to carry on
            business in Canada or a jurisdiction, or the Confederation des
            caisses populaires et d'economie Desjardins du Quebec;

            "CONTROL" occurs if

            (A)   for the purposes of British Columbia securities law,

                  (a)   voting securities of a first party (person or company)
                        are held, other than by way of security only, by or for
                        the benefit of a second party (person or company), and

<PAGE>
                                      D-10

                  (b)   the voting rights attached to those voting securities
                        are entitled, if exercised, to elect a majority of the
                        directors of the first party; and

            (B)   for the purposes of Alberta, Saskatchewan, Nova Scotia,
                  Newfoundland and Labrador and Prince Edward Island securities
                  law,

                  (a)   voting securities of a first party (person or company)
                        carrying more than 50% of the votes that may be cast to
                        elect directors are held, other than for the purpose of
                        giving collateral for a bona fide debt, by or for the
                        benefit of a second party (person or company); and

                  (b)   the votes carried by the securities referred to in (a)
                        are sufficient, if exercised, to elect a majority of the
                        board of directors of the first party; and

            1.    for the purposes of Manitoba securities law,

                  2.    voting securities of a first party company carrying more
                        than 50% of the votes that may be cast to elect
                        directors are held, other than for the purpose of giving
                        collateral for a bona fide debt, by or for the benefit
                        of a second party person or company or by or for the
                        benefit of those other companies; and

                  3.    the votes carried by the securities referred to in (a)
                        are sufficient, if exercised, to elect a majority of the
                        board of directors of the first party company.

            "DIRECTOR"

            (A)   means for the purpose of British Columbia securities law, a
                  director of a corporation or an individual occupying or
                  performing, with respect to a corporation or any other person,
                  a similar position or similar functions;

            (B)   includes for purposes of Alberta, Saskatchewan, Nova Scotia,
                  Newfoundland and Labrador and Prince Edward Island securities
                  law, a person acting in a capacity similar to that of a
                  director of a company; and

            (C)   for the purposes of Manitoba law, a person occupying the
                  position of director by whatever name called;

            "FINANCIAL ASSETS" means cash and securities;

            "FOREIGN JURISDICTION" means a country other than Canada or a
            political subdivision of a country other than Canada;

            "FOUNDER", in respect of an issuer, means a person or company who,

            (A)   acting alone, in conjunction or in concert with one or more
                  other persons or companies, directly or indirectly, takes the
                  initiative in founding, organizing or substantially
                  reorganizing the business of the issuer, and

            (B)   at the time of the proposed trade, is actively involved in the
                  business of the issuer;

            "JURISDICTION" means a province or territory of Canada except when
            used in the term "foreign jurisdiction";

            "LOCAL JURISDICTION" means the jurisdiction in which the applicable
            securities regulatory authority is situate;

            "MUTUAL FUND" includes an issuer of securities that entitles the
            holder to receive on demand, or within a specified period after
            demand, an amount computed by reference to the value of a
            proportionate interest in the whole or in a part of the net assets,
            including a separate fund or trust account, of the issuer of the
            securities;

<PAGE>
                                      D-11

            "NON-REDEEMABLE INVESTMENT FUND" means an issuer,

            (A)   whose primary purpose is to invest money provided by its
                  security holders,

            (B)   that does not invest for the purpose of exercising or seeking
                  to exercise effective control of an issuer or for the purpose
                  of being actively involved in the management of the issuers in
                  which it invests, other than other mutual funds or
                  non-redeemable investment funds, and

            (C)   that is not a mutual fund;

            "PERSON OR COMPANY" includes

            (A)   for the purposes of British Columbia securities law, an
                  individual, corporation, partnership, party, trust, fund,
                  association and any other organized group of persons and the
                  personal or other legal representative of a person to whom the
                  context can apply according to law;

            (B)   for the purposes of Alberta, Saskatchewan, Nova Scotia,
                  Newfoundland and Labrador and Prince Edward Island, an
                  individual, corporation, partnership, unincorporated or
                  incorporated association, unincorporated or incorporated
                  syndicate, unincorporated or incorporated organization, trust,
                  trustee, executor, administrator or other legal
                  representative; and

            (C)   for the purposes of Manitoba securities law, an individual,
                  corporation, partnership, unincorporated or incorporated
                  association, unincorporated or incorporated syndicate,
                  unincorporated or incorporated organization, unincorporated
                  trust, trustee, executor, administrator and other legal
                  personal representative;

            "RELATED LIABILITIES" means

                  (a)   liabilities incurred or assumed for the purpose of
                        financing the acquisition or ownership of financial
                        assets, or

                  (b)   liabilities that are secured by financial assets;

            "SECURITIES LEGISLATION" means

            (A)   for British Columbia, the Securities Act (British Columbia)
                  and the regulations, rules and forms under such Act and the
                  blanket rulings and orders issued by the British Columbia
                  Securities Commission,

            (B)   for Alberta, the Securities Act (Alberta) and the regulations
                  and rules under such Act and the blanket rulings and orders
                  issued by the Alberta Securities Commission, and

            (C)   for other Canadian jurisdictions, such other statutes and
                  instruments as are listed in Appendix B of National Instrument
                  14-101 - Mutual Funds - Definitions and Interpretation;

            "SECURITIES REGULATORY AUTHORITY" means

            (A)   the British Columbia Securities Commission,

            (B)   the Alberta Securities Commission,

            (C)   the Saskatchewan Financial Services Commission, and

            (D)   in respect of any local jurisdiction other than Alberta or
                  British Columbia, means the securities commission or similar
                  regulatory authority listed in Appendix C of National
                  Instrument 14-101 - Definitions;

<PAGE>
                                      D-12

            "VOTING SECURITY" means any security which:

                  (a)   is not a debt security; and

                  (b)   carries a voting right either under all circumstances or
                        under some contingency that has occurred and is
                        continuing.

            BRITISH COLUMBIA SPECIFIC DEFINITIONS

            "SPOUSE", means, for the purposes of British Columbia securities
            law, a person who

                  (a)   is married to another person and is not living separate
                        and apart, within the meaning of the Divorce Act
                        (Canada), from the other person, or

                  (b)   is living and cohabitating with another person in a
                        marriage-like relationship, including a marriage-like
                        relationship between persons of the same gender.

<PAGE>
                                      D-13

                            ANNEX III TO SCHEDULE "D"

                       OFFSHORE SYSTEMS INTERNATIONAL LTD.

                                  FORM 45-103F5

                              RISK ACKNOWLEDGEMENT

        SASKATCHEWAN CLOSE PERSONAL FRIENDS AND CLOSE BUSINESS ASSOCIATES

I acknowledge that this is a risky investment:

-     I am investing entirely at my own risk.

-     No securities regulatory authority has evaluated or endorsed the merits of
      these securities.

-     I will not be able to sell these securities for 4 months.

-     I could lose all the money I invest.

-     I do not have a 2-day right to cancel my purchase of those securities or
      the statutory rights of action for misrepresentation I would have if I
      were purchasing securities under a prospectus.

I am investing $______________________ [total consideration - $1,001 per Unit]
in total; this includes any amount I am obliged to pay in future.

I am CLOSE personal friend or CLOSE business associate of__________________
[state name], who is a ___________________[state title - founder, director,
senior officer or control person] of__________________ [state name of issuer or
its affiliates - if an affiliate state "an affiliate of the issuer" and give the
issuer's name].

I acknowledge that I am purchasing based on my close relationship with [state
name of founder, director, senior officer or control person] whom I know well
enough and for a sufficient period of time to be able to assess her/his
capabilities and trustworthiness.

            I ACKNOWLEDGE THAT THIS IS A RISKY INVESTMENT AND THAT I
                       COULD LOSE ALL THE MONEY I INVEST.

___________________________                          ___________________________
Date                                                 Signature of Purchaser

                                                     ___________________________
                                                     Print Name of Purchaser

Sign 2 copies of this document. Keep one copy for your records.

                                     WARNING

<PAGE>
                                      D-14

YOU ARE BUYING EXEMPT MARKET SECURITIES
They are called exempt market securities because two parts of securities law do
not apply to them. If an issuer wants to sell exempt market securities to you:

-     the issuer does not have to give you a prospectus (a document that
      describes the investment in detail and gives you some legal protections),
      and

-     the securities do not have to be sold by an investment dealer registered
      with a securities regulatory authority.

There are restrictions on your ability to resell exempt market securities.
Exempt market securities are more risky than other securities.

YOU MAY NOT RECEIVE ANY WRITTEN INFORMATION ABOUT THE ISSUER OR ITS BUSINESS
If you have any questions about the issuer or its business, ask for written
clarification before you purchase the securities. You should consult your own
professional advisers before investing in the securities.

YOU WILL NOT RECEIVE ADVICE [Instruction: Delete if sold by registrant]
Unless you consult your own professional advisers, you will not get professional
advice about whether the investment is suitable for you.

For more information on the exempt market, refer to the Saskatchewan Financial
Services Commission's website at http://www.sfsc.gov.sk.ca.

[Instruction: The purchaser must sign 2 copies of this form. The purchaser and
the issuer must each receive a signed copy.]